Analysis: the effects of Jobs’ resignation

Jan Dawson
25 August, 2011
View more articles fromthe author

The effects of Steve Jobs’ resignation will take some time to play out.

There are several reasons why the resignation will not have an immediate impact. Firstly, Tim Cook, former COO and newly appointed successor to Steve Jobs, has been running the company since Jobs began his latest medical leave in January.

Secondly, Jobs will now serve as Chairman and will therefore continue to have a role with the company, at least in the short term. And thirdly, the broad direction and strategy for the company and its major products for the short to medium term will already be in place, and will not be affected by this change.

Longer term, there are more reasonable grounds to believe that Apple may face greater challenges. Though Tim Cook is considered a safe pair of hands as an operational leader, he does not have a reputation as a visionary. And should the time ever come when Steve Jobs no longer has a role with the company, Cook will have to rely on others on Apple’s senior leadership team to provide an ongoing strategic vision, and there is no single figure that obviously fills that role going forward.

Jobs’ legacy

Steve Jobs founded and then later returned as CEO to Apple, which was until the announcement was made the company with the highest market capitalisation in the world. During his first stint as CEO, he created a company which offered an alternative to the Windows hegemony in the PC world, but which always remained marginal in terms of market share.

Following his ouster as CEO and his return, he began rebuilding an Apple that had been on the brink of collapse.

He laid the foundation for the subsequent 14 years of Apple’s history by building a new version of Apple’s operating system, Mac OS X, on technology from his previous company, NeXT. He then built in succession three products that would redefine segments of the technology industry in the next few years: the iPod, the iPhone and the iPad, the latter two running operating systems based on Mac OS X.

Without a doubt, Steve Jobs has been the architect of major shifts in the music market, the smartphone market and the personal computer market. Of the three major new products he created over the past 10 years, the iPod and iPad gained dominant market shares, while the iPhone transformed smartphones from mostly enterprise-centric devices with hardware keyboards and buttons to a series of black slabs with touch screens.

At the same time, these products, the company behind them, and Steve Jobs himself have become the subject of resentment and criticism for their relatively closed and proprietary approach to these products and the related platforms and services.

Little short-term impact

The short-term selloff of Apple shares immediately after the announcement is driven by fears that Apple will not continue to perform as it has once Steve Jobs leaves the CEO role. However, these fears appear relatively unfounded at least in the short term.

Tim Cook, formerly COO and now CEO, has been in day-to-day charge of Apple not only since January but during two previous periods when Steve Jobs’ health prompted extended absences. On all three occasions, Steve Jobs was nevertheless involved in major decisions and continued to set strategy for the company. His new role as Chairman suggests this will continue to be the case even if he does not sit at a desk in Cupertino for eight hours every day.

In addition, Tim Cook has by all accounts managed the company well during these absences, and is considered by most to be a particularly strong operational leader. Since many of Apple’s current challenges revolve around producing sufficient inventory to satisfy demand, these talents will be in high demand and suit Cook well to lead the business. Meanwhile, Steve Jobs will continue to provide the visionary leadership Apple is accustomed to.

Lastly, it is very likely that at least the next iterations of major products such as the iPhone and iPad are already well underway, and that the broad strategic direction for future versions has also been set already, so that there is unlikely to be any impact in the next one to two years.

Longer term, there is a risk of a lessening of Apple’s pre-eminent position

Longer-term, however, if Steve Jobs’ health is indeed behind his resignation, as many have speculated, and his condition worsens to the point that he can no longer be involved in even occasional decision making at the company, there are reasons to fear that the company will struggle to emulate its recent success.

Steve Jobs has provided both strategic vision and personal leadership at the top of the company, as arguably the most visible and well-known CEO of any technology company today. Tim Cook will not step easily into either of these roles, as a safe pair of hands but hardly a visionary or a charismatic figure.

That visionary role now has no obvious owner among the second tier of management at Apple. Jony Ive is well known as the lead designer at Apple, responsible for the look of Apple’s iconic products, while Scott Forstall has a background in product leadership spanning NeXT, Mac OS X and latterly iOS.

It is not clear who among these two (or other senior figures) will step into Jobs’ shoes as a visionary and leader, complementing Cook’s operational leadership.

As such, there may be either conflict among these senior leaders or a lack of clear vision for the company going forward, either of which would be damaging for the company. Cook’s challenge will be to harness and channel the creative energies of the team beneath him such that a single vision and strategy emerges, something that will be difficult to do on a bottom-up basis in contrast to the previous top-down strategic leadership of Jobs.

Jan Dawson is Chief Telecoms Analyst at Ovum

One Comment

One person was compelled to have their say. We encourage you to do the same..

  1. Brandt Hardin says:

    Jobs is done but left his mark on every corner of wireless technology. It only leaves us asking who won the war between the two titans of modern computer technology? Steve Jobs vs. Bill Gates / Apple vs. Microsoft– check out my rendering of an epic match-up of their cyborg selves on my artist’s blog at

Leave a Comment

Please keep your comments friendly on the topic.

Contact us